Sunday, 9 November 2008

(This was written for Pentacle magazine in February 2008. I put it here to show that I did see the credit crunch coming. Sort of.)

It may have been the Sun what won it, but was it Pentacle what postponed it?

Well maybe not, but last Samhain I wrote an article in this very journal laying into the timid and toothless environmental policies of our two main political parties and then, lo and behold, they decide not to hold a general election after all.

The Conservative Party had just published Zac Goldsmith’s eagerly awaited green policy document. It was a libertarian view of a sustainable economy where the government taxes all that’s bad and doesn’t do a lot else. Cynics like me who remember the bad old days of the ‘biggest road building program since the Romans’ and other great Tory policies of the past were left briefly stunned. The Tories going green? Whatever next?

Well, we had news that the US commander in Baghdad had asked for urgent reinforcements of solar panels and wind turbines. It eventually turned out that the US Army was more concerned about the rate that insurgents were blowing up its oil tankers than its carbon footprint, but for a while we were prepared to believe anything.

However as soon as the ink had dried on Zac’s report we had the phoney election and the Tories had to quickly get themselves some real polices. Zac had evidently been hoping some of his green taxes would make it onto the manifesto to balance out the promised cuts in inheritance tax (not something that he’d ever had to worry about himself as his billionaire dad had selflessly spent the last few hours of his life on a plane to Mexico to ensure Zac never had to pay any) Unfortunately for Zac, political reality scuppered that. Asked if he would go for the idea of taxing the parking spaces of out-of-town shopping centres to encourage people back into town centres, Shadow Chancellor George Osbourne replied “Do you think I’m off my rocker?” Perhaps not a question a politician should ask, but it signalled the end for most of Zac’s green taxes.

The government meanwhile weren’t doing much better. Whilst many people distinctly remembered Environment Secretary Hilary Benn, whilst he was with Overseas Development, producing a report supporting Contraction and Convergence (the idea that all nations will gradually reduce their emissions until they all produce the same amount of CO2 per person) but trying to get hold of one has proved to be a bit like trying to lay hands on the Holy Grail. Officially the report doesn’t exist and is just a mass hallucination.

So it was just as well really there wasn’t an election as it would have been a bit tricky trying to work out who to vote for. I’d have either have to have spoilt my paper or voted Liberal Democrat - if there’s a difference. So why are our politicians so useless? The question must be asked, and for my money the answer is it’s a conspiracy.

Now since the internet came along most conspiracies have met their Waterloo. The army of people who shot Kennedy? All named and shamed on the world wide web. The fleet of white Fiat Unos that did for Lady Di? You can get their registration numbers on Wikipedia. The b*stards who seed the clouds so we all get drenched every Beltane? Well, I’m sure well find them soon. Illuminati, Shape Shifting Reptiles, the Gnomes of Zurich; all outed and exposed, which is certain death for a good conspiracy theory.

But here’s one you probably haven’t heard of: the Mont Pelerin Society. Not a great name, I’ll grant you, especially when you discover that Mont Pelerin is a resort in Switzerland. However we can blame the Mont Pelerin’s for the demise of Zac’s green taxes, the government’s woeful failure to regulate climate destroying air travel, the chaos in Iraq and even the fate of the Northern Rock building society.

The Mont Pelerin Society has just celebrated its 61st birthday. Things weren’t exactly great in 1947, even in Switzerland, but with fascism defeated and a huge US aid package getting the war ravaged economies of Europe back on their feet you’d think they’d have reason to be a tad optimistic. However for the Mont Pelerins the world was going to hell in a handcart rapidly.The Mont Pelerin’s beef was with Keynes, not the concrete cows of Milton, but the theories of the economist John Maynard Keynes. An old fashioned liberal, he believed the free market was a powerful, but dangerous beast, and only by government intervention, strict regulation, high taxes in times of economic boom and lots of government spending when it went bust, could prosperity be maintained. All those taxes also meant plenty of money for schools and hospitals, but that was really just a side-effect to the economics.

Keynesian economics had rescued the world from the Great Depression and provided the industrial muscle to defeat Hitler, and they were about to raise the economies of Germany and Japan from the dead, which isn’t a bad track record really. However all those taxes didn’t go down too well with a certain well heeled faction of society or with those economists who believe that big business knows best.

So the Mont Pelerins set about changing the world. Their mantra was freedom. Specifically they meant the freedom of corporations to do whatever they wanted, but in their campaign to get their message out they used the broadest definition of freedom they could get away with. Their work, which they thought would take a generation, was to subvert the name of freedom to suit their definition.

By any standards they were spectacularly successful. In the sixties freedom meant sex, drugs and public nudity, by the end of the next decade it meant privatisation, tax cuts and unlimited consumption. Keynes was quietly shuffled off to the old economists home. The neoliberals were in charge. The Mont Pelerins hold that all taxes are bad - sorry Zac, that government regulation is worse - RIP Contraction and Convergence and that corporations can do what they want - even if they happen to be a major building society whose reckless investments would threaten the whole UK banking sector.

Now a conspiracy isn’t a real conspiracy unless someone dies horribly, so it shouldn’t be too much of a surprise that neoliberalism leaves more than its fair share of bodies in its wake. The first experiment in running a neoliberal state was in Chile in 1973, when General Pinochet, having overthrown a democratically elected government and then tortured and murdered a few thousand of his fellow citizens, invited in the President of the Mont Pelerin Society, Milton Friedman, and his Chicago chums to advise on free-market reforms.

Chile provided the model for a whole series of economic ‘rationalisations’, the most dramatic and purest of which was what happened in Iraq after the US and British occupation. The entire government, army and police force was dismantled overnight and the whole country thrown open to the multinationals. To deal with the subsequent unrest the world’s largest army of mercenaries was then flown in. The results we see on TV today.

The effects of our own dose of neoliberalism is somewhat milder, but never-the-less we can still see its effects. The gap between rich and poor, which was actually falling in the 1970s, has increased exponentially, and whilst neoliberals don’t like governments spending money on things like the environment, they don’t mind your taxes being used to bail out failing building societies like Northern Rock. After all, the alternative would have been for a lot of rich people to loose a lot of money. (Small investors were already largely protected by a government scheme.) Indeed the reluctance to actually nationalise the failed Rock, even after several billion pounds worth of tax payers’ money had been bunged their way, was illuminating. It was as if having paid for the goods the government was reluctant to actually take them out of the shop.

Indeed Northern Rock is illustrative in another way. Its disgraced, but still extremely rich, chairman Matt Ridley had a column in the Daily Telegraph in the 1990s where, in addition to calling for less regulation of the banking sector, he used to be a prominent Climate Change denier. He certainly wasn’t the only one, and environment policy certainly wasn’t the only area where governments preferred the advice of big business to that of their electorate, or even common sense. Across the pond, for example, Bush has consistently refused to reveal the names of the advisors who put together his energy policy, almost certainly because one of the them was the disgraced former head of Enron, whilst over here when Labour wanted to look at how to reform social services they asked Derek Wanless, one of the board of Northern Rock who had failed to foresee its doom.

The problem, of course, is what we do about it. If neoliberalism was just an economic theory the path would be clear. The old joke is that if you laid all the world’s economists end to end they still wouldn’t reach a conclusion, but even the most die hard disciple of Friedman et al would have to admit that the series of economic collapses that have ricocheted around the world over the last quarter of a century indicate that all is not perfect in the world of neoliberalism. However if it really is a conspiracy then something more direct would be needed.

It’s ten years now since the ‘Battle of Seattle’ - the start of global anti-capitalist demonstrations that have continued ever since. Rioting has its limitations as viable strategy for building change though, and as people frequently point out, the anti-capitalists know what they’re against, but seem a bit hazy as to what they’re actually for. A more serious problem though is that so successful has the Mont Pelerin Society’s campaign been to redefine freedom as an absence of government interference that your average Starbucks-smashing masked anti-capitalist is just as likely to hold these views as his braces wearing yuppie nemesis. A more viable solution appears to be needed.

Now asking people to love government isn’t going to go down too well I know, especially amongst such an anarchic lot as pagans, but really there isn’t a lot of choice. But more government doesn’t just have to mean big government. Local democracy is surely the way forward, and also the way to challenge the perverse freedom of the Mont Pelerins. The way this can happen may be about to be shown in London.

Now whether a city of eight million people can ever be called ‘local’ is a moot point, but unlike most of us Londoners are able to directly elect their leader. By the time you read this we should know which Have I Got News For You contestant has managed to become Mayor. For a chap who cycles everywhere Boris Johnson is remarkably unpopular with environmentalists, whilst his opponent, despite trying to cover the city with tower blocks, has made a lot of green friends by introducing the Congestion Charge. This is the sort of government meddling that makes neoliberals see red so it’s not too much of a surprise that it has become a political hot potato.

At first sight this would appear to be a simple matter of letting the voters decide, but one company has other ideas. Sad to say the company is Porsche. In the Fifties that first icon of cool, James Dean, drove one. In the Sixties Steve McQueen raced through the night at Le Mans in one whilst in the Seventies legions of Gaulois smoking French rally drivers slithered over icy mountain passes in theirs. However when neoliberalism arrived in the City in the eighties and the stock brokers swapped their bowler hats for braces, Porsches became a yuppie fashion accessory and it was all downhill for the company. Your average Porsche these days isn’t even a sports car, but a truck sized monstrosity called a Cayenne.

Ken Livingston has pledged to make these gas guzzlers pay £25 every time they visit the City. If the people of London don’t like that they can always vote for Boris, but for Porsche this wasn’t enough and so they’ve launched a legal challenge. Democracy and big business once more seem to be at odds and if the Mont Pelerins had their way the Germans would be the ones who win.But despite all this I refuse to be the peddler of doom and gloom. If you are concerned about the state of the world but worry that giving up money may not be practical or desirable then Keynesian economics offer a solution. If you worry that the multinational corporations can’t be stopped then worry no more. They fear government regulation because it works.

There are also hopeful signs that the world of economic theory is moving in this direction too. The Organisation of Economic Cooperation and Development is a forum where global economics are discussed and where those who disagree with the neoliberal consensus can be knocked back into line. In the mid nineties it drew up a plan, known as the Multilateral Agreement on Investments, to let the multinationals conquer the world. This nefarious scheme which had the fingerprints of the Mont Pelerin Society all over it, but swift action by campaigners exposed the secret plot and in the aftermath of the ‘Battle of Seattle’ European governments bottled out.

Now, a decade later, the OECD appears to have changed its spots. Looking ahead to the state of the world in 2030 it identifies the main threat to the world’s economy not as protectionist governments, and certainly not masked anarchists, but, wait for it, environmental degradation. Perhaps even more surprisingly it, actually believes that governments should do something about the problem before it’s too late. I’ll repeat that again so that the gravity of this statement sinks in: governments should do something about it. The details are a bit vague and this isn’t exactly the same as saying old Keynes should be disinterred, but it is a seismic change.

Finally, in case anyone still thinks that economic theory is not only dull but useless, I’ll end by quoting the man himself: “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood……..Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back”.

For too long those scribblers have belonged to the Mont Pelerin Society, but perhaps the madmen will in future hear a different voice.